American Royalties Too Act

What is the American Royalties Too Act?

The American Royalties Too Act (“ARTA”) is a bill that aims to remedy the lack of royalties that artists in the US receive upon resale of their works.

The Bill, re-introduced in 2015 by Senators Tammy Baldwin (D-WI), Ed Markey (D-MA) and Jerrold Nadler (D-NY), proposes that artists whose works are resold at auction for more than $5,000 be given a five percent royalty from these sales by the auction house. This new bill is a less radical iteration of its predecessor, which stipulated a seven percent royalty with no cap – this bill sets a $35,000 limit to be paid 90 days after the auction (1).

What is the current law?

In the US, an artist can receive royalties from his or her first sale only - and this right is only recognized in 31 states.

Only California has provisions for artists to receive royalties from later sales, thanks to the 1976 California Resale Royalty Act. But even this has limits – the royalty must be paid to any descendant within 20 years of the artist’s death.

Europe has a more artist-friendly approach. There, the “droit de suite” extends to works that are sold subsequent to the first sale, so that artists or their estates can reap the benefits of higher resale costs. More than 70 countries adhere to this system, borne out of the Berne Convention.

Why should this bill be supported?

ARTA’s definition of work of visual art is “a painting, drawing, print, sculpture, or photograph, existing either in the original embodiment or in a limited edition of 200 copies or fewer.” (2) Many artists’ work does not fall into this category. If ARTA were to be passed, artists whose products are not within these confines would receive the appropriate remuneration for their donations.

Although auction houses may argue that this unnecessarily impacts the high-end secondary segment of their market, the fact is that US artists do not receive the same treatment as their European counterparts. This bill would lay the groundwork towards putting them on an even footing.